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Correspondent

21 August 2024 at 10:20:16 am

Fuel Shock

The latest increase in petrol and diesel prices — the fourth hike in just 11 days — underlines how vulnerable India remains to geopolitical turmoil and its own unfinished reforms in the energy sector. Brent crude surged again after fresh American military strikes in southern Iran deepened fears of the renewal of the Iran conflict on a higher scale. Markets are now gripped by uncertainty as hopes of a negotiated settlement continue to fade. For a country like India, which imports more than 80...

Fuel Shock

The latest increase in petrol and diesel prices — the fourth hike in just 11 days — underlines how vulnerable India remains to geopolitical turmoil and its own unfinished reforms in the energy sector. Brent crude surged again after fresh American military strikes in southern Iran deepened fears of the renewal of the Iran conflict on a higher scale. Markets are now gripped by uncertainty as hopes of a negotiated settlement continue to fade. For a country like India, which imports more than 80 percent of its crude oil requirements, every geopolitical tremor in the Gulf quickly translates into pain at the fuel pump. Since May 15, petrol and diesel prices have risen cumulatively by nearly Rs. 7.5 per litre. In Hyderabad and Thiruvananthapuram, petrol has crossed Rs. 115 a litre. Mumbai, Kolkata, Bengaluru and Chennai are all witnessing sharp increases. Even Delhi, traditionally cushioned by relatively lower taxes, has seen petrol move beyond Rs. 102 per litre. This marks a significant shift after nearly four years of relative stability in retail fuel prices. For long periods, state-run oil marketing companies absorbed the burden of elevated crude prices, shrinking refining margins and a weakening rupee. Political considerations, particularly around elections, often delayed price revisions. The Rs. 2 per litre reduction announced ahead of the 2024 national elections was a reminder that fuel pricing in India has never been entirely divorced from politics. But oil companies cannot indefinitely absorb mounting losses, especially when global crude prices remain elevated. The Centre has already cut excise duties, with Finance Minister Nirmala Sitharaman estimating the revenue sacrifice at nearly Rs. 1 lakh crore. That fiscal cushion has now largely been exhausted. The spotlight is therefore shifting towards states. VAT on fuel remains one of the most lucrative revenue streams for state governments, with some states imposing levies exceeding 30 percent through taxes and cess components. This explains why states such as Telangana, Kerala and West Bengal continue to record some of the highest retail fuel prices in the country. The Centre is now subtly nudging states to reduce VAT rates to soften the blow on consumers. Yet states are reluctant. Their dependence on fuel taxes is structural, not incidental. Apart from excise on liquor, few revenue sources offer such steady and politically manageable returns. Bringing petrol and diesel under the GST framework continues to face bipartisan resistance from states fearful of losing fiscal autonomy. Rising fuel prices do not remain confined to petrol stations. They seep into every layer of the economy as transportation costs rise, food inflation accelerates and household budgets shrink. Small businesses, already coping with weak consumption and high borrowing costs, are facing renewed pressure. India’s recurring vulnerability to crude oil shocks exposes the limits of its energy security architecture. Expansion of strategic petroleum reserves and greater investment in renewable energy can no longer remain aspirational talking points. They must become urgent national priorities.

One Man’s Vision, One Village’s Transformation

Chandrakant Dalvi didn’t leave Nidhal behind—he returned with a vision and turned a drought-prone village into a model of modern rural development.


Imagine standing in a drought-prone field, the ground cracked and dry under the harsh sun. Women pass by, balancing pots of water on their heads. Roads are poor, the local school is crumbling, and mud houses stretch along a barren landscape with barely a patch of green. You wouldn’t want to stay there, nor did Chandrakant Dalvi.


But this remarkable man didn’t turn his back on the harsh reality of his birthplace—Nidhal village in Khatav Taluka, Satara, Maharashtra. A boy who studied in the village school went on to pursue higher education and returned as an IAS officer. His journey and achievements are well-documented online, so I won’t repeat that. Instead, I hope to capture him in words that go beyond his career and title.


A man so deeply rooted in his land that, for over four decades, he has worked for the development of a place most wouldn’t even wish to imagine standing in. And this seed of change wasn’t sown after he earned a prestigious post. It began during his MSc (Agriculture) in 1980–81, when a young man with a spark in his eye started researching Nidhal. The rest, as they say, is history.


Often, those who leave their hometowns rarely return. But Dalvi is a clear exception; he left to come back, driven by a spirit of transformation. I’ve never met him, and perhaps never will. But I met him through the book Nidhal: Gramvikasacha Dalvi Pattern by Sunil Chavan.


I’ve had the privilege of knowing the author, Chavan, since childhood. Straight-talking yet compassionate, and deeply rooted in agricultural and rural life—who better to bring this book to life?


An actor by profession and a philanthropist by passion, Nana Patekar has worked tirelessly for sustainable water solutions through the NAAM Foundation. In the book’s foreword, he recalls being given a write-up on Nidhal but chose to visit first, reflecting his genuine commitment. He also believes the story deserves a place in the curriculum for its power to inspire rural development across India.


More than a book, this thoughtfully crafted volume serves as a handbook for anyone interested in rural development—those who’ve left their villages, social workers, gram panchayat members, or villagers aiming to uplift their communities.


As for that ‘new height’—remember the drought-prone land we imagined? It’s now a transformed village with modern infrastructure: water supply schemes, connecting roads, healthcare services, multi-purpose gardens, and more.


Dalvi’s MSc research laid the foundation for the initiative. He found that around 750 people had migrated to cities like Mumbai and Pune. In 1983, under his leadership, an association was formed, and all 750 were invited to celebrate Diwali in Nidhal—over 400 attended.


At this gathering, it was decided that migrants would contribute Rs 101 annually, and each village household Rs 51, until the high school was built. This continued for nearly 10 years, resulting in a beautiful school.


Dalvi has been devoted to holistic rural development. In his retirement year, 2018, he founded the SATV Foundation (Strategic Alliance for Transforming Villages). Inspired by the Nidhal model, SATV now works in 15 villages. Nana Patekar has said NAAM and SATV will soon collaborate for greater impact.


As mentioned, Dalvi is an exception. A driven young man who earned a prestigious government post, he worked tirelessly for village development from day one, through retirement, and beyond, collaborating with villagers, professionals, and businesspeople. His dedication is truly rare and inspiring.


Mumbaikars may know the Mahalaxmi Saras Exhibition, the vibrant event showcasing exquisite handicrafts, antiques, and authentic regional food. Among many stalls, 65 women from Nidhal stand out, winning awards. Next time you visit Saras, be sure to find Nidhal’s stall.


This remarkable village has earned prestigious titles and government honours, including the SAARC Village Award, ECO Village recognition, the National Water Award, and the Nirmal Gram Puraskar. IIM Kolkata students have researched its transformation, and a student group from IIT Bombay held a camp in Nidhal to study its progress.


This remarkable journey from a neglected village to a modern one wasn’t overnight. Over 41 years, Mr. Dalvi and his supporters faced hardships and setbacks with determination and resilience.


Now their success is what I truly call a ‘new height’!


At this point, I should probably stop myself from giving away too many spoilers.


After reading the book and researching Nidhal and Dalvi, I believe no development is possible without consistent, united effort and a visionary leader like him to guide the way.


And I can’t thank Chavan enough for capturing and presenting this entire upward journey so beautifully.


On this note, I’d like to say, “Mehnat ka phal hamesha Nidhal hota hai!”


(The writer is a law student based in Mumbai.)

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